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Wearables are a hard business, and TomTom is getting out of it

TomTom Runner GPS Running Watch Cover Pic
Image used with permission by copyright holder
It’s likely that you know it best for its GPS software and products, but TomTom has been in the wearables game for years as well. But as we know, and as previously proven by both Jawbone and Fitbit, that’s a difficult game to win. Now, TomTom has announced that it’s laying off 136 employees in order to shift focus away from wearables and towards its bread and butter — mapping and navigation.

The decision comes as a result of the company’s Q2 earnings report, which was announced in July. At the time, the firm noted strong numbers in both its automotive and licensing businesses. Conversely, its consumer products division posted far weaker numbers, with revenue down 20 percent. At that point, the Dutch company had already begun to foreshadow a course correction, with CEO Harold Goddijn noting, “We are not satisfied with the progress we are making (in sports).” Now, it would appear that TomTom is not looking to make any further progress at all in that realm.

57 of the jobs affected will be in the Netherlands, and the remaining positions will be cut from offices including the U.S. and Taiwan.

To be fair, wearables never seemed to be a particular focus of TomTom’s. Indeed, the layoffs represent less than 3 percent of the company’s 4,700-person strong overall team, and indicates precisely where TomTom’s expertise really resides. Its recent decision, then, “reconfirmed its strategy to build on its leading position in navigation technologies and to provide location content, software, and services to business customers,” the company noted in a statement.

TomTom is a partner to a number of large companies, including Uber, Microsoft, Cisco, and Baidu, each of which depends upon TomTom for maps, location data, and traffic monitoring. But even still, the company isn’t giving up altogether on everything outside of these key areas of focus. TomTom noted that it would “continue to sell consumer sports products, and support its Sports customers.”

So while you’re probably good to for buying your GPS devices from TomTom in the near future, you never know — there could be some product differentiation somewhere down the line for the company as well.

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